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Question

What is the difference between a with-profit and without-profit insurance policy?

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Solution

In the case of with-profit policy, the assured gets not only the sum assured but also a share in the profits that are declared by the insurer. These profits are declared at intervals and credited to the policy holder as bonus. On the other hand, in without-profit policy, the policy holder does not get any right to share in the profit of the insurer. The rate of premium for without-profit policy is lower than the with-profit policy.

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